As Michael Flynn Pleads Guilty We Ask: What Does Reza Zarrab Know?

Just across the wires on Friday morning is news that Michael Flynn, the former Trump Administration national security adviser, will plead guilty to lying to FBI agents about his contacts with a Russian envoy.

A plea hearing is set for 10:30am.

• MICHAEL FLYNN TO PLEAD TO FALSE STATEMENTS IN D.C. COURT
• COURT HAS SCHEDULED A PLEA HEARING FOR FLYNN: CNBC

With that serving as the setup, consider everything that’s happened this week in the case of gold trader Reza Zarrab and what the implications may be for Flynn and ultimately for the Trump administration.

Ilnur Cevik, senior adviser to Recep Tayyip Erdogan, isn’t thrilled about the federal trial in Manhattan where Zarrab testified on Thursday that the Turkish President instructed banks to participate in an oil-for-gold scheme that allowed for the circumvention of U.S. sanctions on Iran.

Specifically, Cevik says that Gulenists have “hijacked” the U.S. justice system in an effort to undermine Erdogan. As usual, you’re reminded that this is just as absurd as it sounds.

“Fethullah Gulen, or FETO, has hijacked the American justice system with the Zarrab case and they are trying to use it to create a smear campaign that they hope will eventually harm Erdogan,” Cevik said in the Daily Sabah on Friday, and by God he didn’t stop there.

“The judge, the prosecutor and even the so-called expert witness have proven affiliations to FETO,” he continued, before predicting that “it will be a lopsided trial where the prosecution, with blessings from the judge, will be able to present so-called doctored documents that would have been impermissible in any other court in the U.S.”

Next, Cevik claims, “the prosecutor will try to accuse Turkish government officials of wrongdoing and breaking American law by violating U.S. sanctions on Iran” as part of Gulen’s ongoing effort to “stage a show to embarrass Erdogan.”

And Cevik didn’t express much in the way of faith that Trump is going to help out. “What is sad is that the U.S. administration will just watch as their justice system is butchered in New York, as certain Americans will try to use the court ruling to defame the Turkish government and deal a blow to Turkey,” Cevik continued. #Sad.

If you’re not familiar with this story, allow us to run through the basics for you.

Earlier this month, Reza Zarrab disappeared from the Metropolitan Correctional Center a sure sign he was cooperating with prosecutors. Zarrab has long-standing ties to Erdogan and earlier this month, the Turkish lira plunged after documents introduced in a filing in federal court in Manhattan detailed recorded phone calls that found Zarrab invoking Erdogan’s name.

This is one of the key points of contention between Ankara and Washington. As we detailed last month, Erdogan variously (and vociferously) debated the issue with the previous administration, pleading his case to Joe Biden, compelling his wife to beg Jill Biden to intervene, and in his last two phone calls with Obama, similarly appealing to have the matter resolved.

As with all things related to Erdogan, there’s a connection to his arch nemesis,  Pennsylvania resident Fethullah Gulen. If you ask Erdogan, Gulen operates a vast network of conspirators who are engaged in a perpetual attempt to undermine the Turkish President’s rule. Gulen was, according to Erdogan, behind the failed 2016 coup and also behind the leaked evidence which implicated Reza Zarrab.

There’s rampant speculation that Zarrab has been flipped by Robert Mueller in an effort to extract information about Michael Flynn, who is implicated in a plot to deliver the above-mentioned Fethullah Gulen to Erdogan in exchange for $15 million.

Erdogan has long claimed that Preet Bharara is a bad actor who is operating at the behest of Gulen. Erdogan brought this up with Joe Biden, going so far as to call Bharara “a Gulenist tool.” He also demanded that the then-Vice President  have Bharara fired. Of course Bharara was ultimately fired — only not by Joe Biden. But rather by Donald Trump.

And it goes well beyond that. Back in March, when Rex Tillerson visited Turkey, Foreign Minister Mevlut Cavusoglu reiterated Erdogan’s demand that Gulen be handed over to Turkish authorities and while standing next to Tillerson at a press conference accused Preet Bharara (who had been fired by Trump just two weeks earlier) of being a Gulen pawn.

Just a month before that March meeting between Tillerson and Cavusoglu, Erdogan met with Rudy Giuliani and Michael Mukasey who Zarrab had added to his legal team.

Giuliani called Bharara on February 24 and told him about his planned trip to Turkey. On that trip, Giuliani attempted to secure some kind of concessions from Erdogan in exchange for the release of Zarrab.

Bharara was fired by Trump just 15 days later.

Later, Joon H. Kim — who became the acting U.S. attorney in Manhattan after Bharara was fired — wrote to the judge arguing that the court was “entitled to better understand” the roles of Giuliani and Mukasey. His office also said Giuliani and Mukasey “sought to meet other officials in the U.S. government” to discuss Zarrab.

I think it goes without saying that this is laughably suspect. And it all came within a month of Donald Trump asking James Comey if he was willing to “let [Michael] Flynn go.” That would be the same Michael Flynn who was a paid surrogate for Turkey and who Mueller is now investigating for plotting to kidnap Fethullah Gulen, the same Gulen who Erdogan claims is in cahoots with Bharara.

So that brings us to Thursday when, as The New York Times details, Zarrab “testified that in 2012, a senior Turkish official told him that Erdogan and a second official, the treasury minister, had given orders for two Turkish banks to start doing the [oil-for-gold] trade.”

As the Times goes on to remind you, “Zarrab’s testimony marked the first time Erdogan has been implicated in the alleged sanctions busting, which first surfaced when the Turkish police uncovered the activity in 2013 – only to have their investigation quashed by Mr. Erdogan’s government.” 

Apparently, Zarrab doled out “tens of million” worth of bribes to then-economy minister Zafer Caglayan who gave the official approval for the trades on behalf of Erdogan. Caglayan demanded 50% of the profits on the deal and bribes were also paid to the general manager of Halkbank, Suleyman Aslan. Both Aslan and Caglayan are in the wind.

Ok, so what about the Flynn connection? Well, there’s certainly reason to believe that it is no coincidence that Flynn’s lawyers stopped cooperating with Trump’s lawyers just days after Zarrab was apparently flipped. You can read more about the background on this here, but as we noted a week ago, if Flynn is cooperating with Mueller in order to save his son (who is also said to be at serious risk of indictment), that’s bad news for Trump and Jared Kushner.

Well in light of recent events involving Zarrab, multiple outlets are back on the Flynn trail, including The Daily Beast. To wit, from an article on Wednesday:

Zarrab’s cooperation with federal prosecutors raised speculation that he was also cooperating with special counsel Robert Mueller’s inquiry into Flynn, because it seemed unlikely prosecutors would offer a plea deal to Zarrab in exchange for his cooperation for the comparatively lower-profile trial of Atilla.

Shortly after Zarrab seemed to flip, Flynn’s lawyers terminated a joint defense agreement with the Trump defense team last week. Flynn’s lawyer reportedly met with members of the Mueller probe on Monday, ABC News reported, a further indication that the embattled ex-national security adviser is also pursuing a plea deal.

Zarrab’s plight was reportedly raised by Turkish interests in a December 2016 meeting with Flynn, who was designated to be President Trump’s national security adviser. Flynn was supposedly offered $15 million to arrange Zarrab’s release and to kidnap an exiled Turkish cleric living in Pennsylvania, Fethullah Gulen, and bring him to Turkey. (Turkish President Recep Tayyip Erdogan accuses Gulen, a former ally, of orchestrating a failed 2016 coup.)

And if that’s not enough for you, consider this from New York Magazine:

The crux of United States v. Zarrab, as the case was formerly known, is ultimately about U.S. sanctions, and how a group of high-ranking and well-connected Turkish actors, including Zarrab, may have conspired to assist Iran in skirting them through fraud and elaborate money-laundering schemes. In Berman’s words, these are “serious charges.” But the fact that federal prosecutors have flipped Zarrab and offered him a deal could also hold the key to another case that has long kept Trump awake at night: the federal investigation of Michael Flynn, his former national-security adviser and now a target of Robert Mueller, the Department of Justice’s special counsel probing Russia’s disruption of last year’s presidential election.

Until Mueller goes public with charges against Flynn – who may have flipped himself, and could be nearing a deal of his own with the special counsel – there’s no indication of how Zarrab may have sung and implicated the disgraced lieutenant general. But consider the public record: It’s no secret that Flynn had extensive ties to the Turkish government, even after Trump selected him to serve as his incoming national-security adviser. Of these liaisons, the most fantastical one on Mueller’s radar is a shady plotby Flynn to return to Turkey an archnemesis of President Recep Tayyip Erdogan, Fethullah Gulen, who for years has been living peacefully in Pennsylvania and yet, in the Turkish imagination, is said to have orchestrated a failed coup against the Erdogan regime. But there’s more: NBC News reported earlier this month that at the same December meeting where the Gulen plot was discussed, Flynn and his Turkish associates may have broached how to ensure Zarrab’s freedom and thus bring some peace of mind to Erdogan, who has lashed out publicly against the case and even the judge handling it. As reported, the whole deal could’ve earned Flynn and his son about $15 million.

What does Zarrab know about Flynn, if anything? Since his arrest during a family trip to Disney World in March 2016, Zarrab has remained behind bars in New York and disconnected from much of the outside world. Under those conditions, how might he have gotten dirt on Flynn that could be useful to Mueller? The answer to that may lie in the hands of two attorneys in Trump’s orbit who are also part of Zarrab’s dream team of lawyers: Rudy Giuliani and Michael Mukasey. After Flynn left the White House, the pair flew to Turkey to meet with Erdogan to try to reach a diplomatic resolution to the Zarrab case. For all that’s publicly known, Giuliani, Mukasey, or anyone in Zarrab’s legal team may be privy to the true extent of Flynn’s dealings with a country for which he is a registered foreign agent.

Now you can see all the doors that Zarrab might have opened up for Mueller. And again, I would ask you this: is it a coincidence that Flynn’s lawyers stopped cooperating with Trump just days after Zarrab was flipped? That’s clearly not a coincidence.

It also comes as no surprise that Trump has spoken with Erdogan recently, ostensibley about the YPG and about “peace” in the Mideast. You can be sure that Flynn and Zarrab came up in that call.

Stay tuned, because you can bet that much (much) more is going to surface about this over the next month.

And see here’s the thing: obviously Flynn was allowed to plead to the charge outlined above because he’s been offered some kind of deal by Mueller. The question now is what Mueller got in exchange. Or, as the New York Times puts it, “the plea would be the latest indication that Mr. Flynn was cooperating with the special counsel’s investigation into Russia’s interference in the 2016 presidential election.”

NBC NEWS SPECIAL REPORT: Michael Flynn charged with making false statements to the FBI pic.twitter.com/T4hmHaQoIG

— NBC News (@NBCNews) December 1, 2017

"lock her up." pic.twitter.com/GcBhPI0Kwo

— Heisenberg Report (@heisenbergrpt) December 1, 2017